Shortly after 6pm London time yesterday, The ECB’s Benoit Coeure told a non-public audience of hedge funds in London that “the central bank would moderately front-load its purchases in its quantitative easing program because of the seasonal lack of market liquidity in the summer.” The reaction was a 50 pips drop in EURUSD… but this was inside information was not released to the trading public until around 8am London time – and resulted in a 150 pip plunge.
Translation: as we pointed out with the usual dose of sarcasm observing just how rigged everything has become, a select private group of head funds in London were leaked ECB front-loading news 14 hours before The ECB deemed it ‘correct’ to publicly release the comments…
In his speech, Mr. Coeuré said that the ECB is aware of seasonal patterns in the bond market and that there is generally less liquidity on the market from mid-July to August.
“The Eurosystem is taking this into account in the implementation of its expanded asset purchase program by moderately front loading its purchase activity in May and June,” he said.
Crucial news for anyone, but as The Wall Street Journal reports,
Mr. Coeure’s remarks, delivered Monday night in London to a nonpublic conference organized by Imperial College Business School/Brevan Howard Centre for Financial Analysis, the Centre for Economic Policy Research and the Swiss National Bank…
…prompted a steep slide in the euro and rally in European stocks after they were publicly released early Tuesday, as investors were reassured that the ECB will continue with its aggressive bond purchase program.
But The ECB is unrepentent…
“This was an evening speech under the Chatham House rule, which wouldn’t normally be published. In this case the intention was to publish the speech at the time it was delivered, but an internal procedural error meant this didn’t happen until the morning,” an ECB spokesman said.
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Still think the whole ‘game’ is un-rigged?
That leaves us wondering – just how many other mysterious market moves can be explained by “Chatham House rule” meetings heald by The ECB each day/week/month?